Pacific Grove >> City officials moving forward to enact Pacific Grove’s revised short-term rental policy have opted out of using a lottery system to determine which applicants will receive future licenses in areas over-saturated with such rentals.

That was the decision made Monday night on a 4-2 vote at a special meeting/workshop held at the Pacific Grove Community Center to clarify the short-term rental lottery procedure. The four-hour meeting had upward of 100 in attendance, many of whom were short-term rental owners. Council members Bill Peake and Nick Smith were those that remained in favor of keeping the lottery. Councilman Robert Huitt was not in attendance Monday.

It was in October that council members approved the first reading of Pacific Grove’s amended short-term rental policy. That ordinance incorporated the use of a lottery system that would siphon out short-term rentals in areas where their numbers exceed density requirements.

The ordinance, which will now have a new first reading at the Dec. 6 council meeting, allows only 15 percent of housing per block dedicated to short-term rentals and for that number to include both Type A (owner doesn’t necessarily reside at site) and Type B (owner resides on site) licenses. Other changes include adopting a 55-foot zone of exclusion to address density problems of short-term rentals and that the total number of STRs be capped at 250 citywide.

City Manager Ben Harvey said that while council members are satisfied with the newly-revised ordinance, those that voted against having a lottery are hoping that the number of short-term rentals drops on its own. Currently there are 289 short-term rentals in the city.

“They want to see if we lose some licenses through attrition,” said Harvey, noting that at Monday’s meeting he did inquire whether or not council members would want to address future density issues that still may be present without a lottery in place.

“Certainly the new ordinance will address density but it doesn’t alleviate the existing concerns about it,” added Harvey. “So what I’m hearing is that we don’t want to address the density concerns now but maybe we want to address them later.”

“In effect, the council has voted to grandfather in existing STR licenses as a result of the decision,” said Peake. “The mechanism to reduce the density of STRs was the lottery.”

“There were several people who had invested significant amounts into property – in many cases invested significantly in dilapidated property,” said Kampe, noting that a lottery would impact up to 60 short-term rentals. “I think it’s imperative that we are cautious as to how we approach any of these steps. So part of this will buy some time to see if attrition will solve some of the density problem and then the other part of it is to make sure we look closely to see if we’re looking at the best possible approach.”

Peake, who said he expected to tweak the lottery component of the revised ordinance at Monday’s workshop but never to do away with it entirely, reiterated his overall stance on short-term rentals.

“I’m opposed to STRs because of the impact on neighborhoods,” said Peake. “We’re selling out neighborhood for the tax dollars and we’re reducing housing stock.”

For now, Harvey said he’ll take a step back to determine just how many current short-term rental licenses are idle and what exactly determines an idle license in the first place.

“Do we have a bunch of people that have short-term rentals that they just aren’t renting?” asked Harvey. “I need to see the data to produce some sort of thoughtful recommendation. Then we’re going to be working on how last night’s direction should manifest itself in the revised first read coming back on the sixth.”